Peter Spann Strategy, anyone made it?

[chilliaa]

If Peter Span's theories are so clever then someone please answer why the NTA in his listed investment company, FXI has experienced such a drop in Net Tangible Assets. Isnt the purpose of writing covered call/puts etc supposed to create additional income but support the capital invested.
Net Tangible Assets at 30 June 2008 was $1.011
Net Tangible Assets at 31 December 2007 $1.38

The overall performance was negative 27%. This is worse than just an index fund investing in the ASX200.

 

[JIT]

The overall performance was negative 27%. This is worse than just an index fund investing in the ASX200.

Ouch, and that's not mentioning any fees either!

What do you think Peter?

 

[Peter Spann]

Did you take into consideration the dividends?
NTA is Net (so fees have been considered)

 

[chilliaa]

Did you take into consideration the dividends?
NTA is Net (so fees have been considered)

last dividend was paid out on 16/11/07.
No dividend paid between 1 Jan08 and 30 June08.
Thus no impact on the movement of NTA between 31 Dec 07 and 30Jun08.

 

[Peter Spann]

Out of respect for shareholders and compliance I would like to refer interested parties to the company's public announcements.

I believe the discussions in this thread have been broad and mostly well put. If you add this to other comments in other threads on the same / similar topics I don’t have much to add.

 

[chilliaa]

Sorry Peter, my intention was not to pick on you directly.
There has been much discussion on this forum regarding using options/derivative products etc to enhance trading and investment returns.
Whilst they sound good in theory, in practice they need a skilled operator to effectively utilise. And then black swan events may occur from time to time that 'destroy' the benefits of their usage.
I merely used FXI, because the information is publically accessable, and it allowed me to make a point, that using trading strategies dont always work.

 

[Peter Spann]

Whilst they sound good in theory, in practice they need a skilled operator to effectively utilise.

This I agree with 100%

 

[duckster]

I have attended Peter Spann's seminar Welcome to Wealth and also done the instant income course. One of the stipulated items not mentioned was having a job. As I haven't had a full time job since July 2001 I haven't implemented his strategy.
By having no income I have realised that this is an important factor as well as having a booming property market. Market timing is very important !!

In regards to buying quality stocks and then selling a covered call option and buying a put option you need a lot of money. As an example TLS shares are at $4.54 so to buy the minimum needed for one option you need to buy 1000 x $4.54 which is $4540 and not all shares have options. Now take BHP at $37 a share for one sold covered option you need to buy $37,000 worth of BHP.
There is another strategy known as a call bear spread that involves writing a naked call option and buying a call option but it is more RISKY as you can lose money.

I did make a capital gain of $70,000 while at University but was forced to sell and realise the capital gain as I had no income to cover the shortfall in cash flow when I graduated from the University and no one would employ me and was forced by circumstances to become a house dad. Although I haven't worked for such a long time I will own my other investment property in 12 months time in Aug 2009. Just think how much I can utilise the Spann method with $180,000 in equity when I start working again.

 

[mercurio]

This I agree with 100%

Oh your good!!

 

[Bill.L]

Even I'm going to go into bat for Peter on this.

Market Follower,

That is nothing but a low attack. If you are going to post make it something constructive. Comment on a plan, show your experience, knowledge or anything but this.

I do not necessarily agree with all of Peters postings, but still only comment on investment issues where we agree to disagree on some things.

Nobody who gives up their time to post on this forum should have to put up with your rubbish.

bye

 

[crc_error]

lol look at this:

http://www.peterspann.com.au/investing.html

26.23% Average Total Return 3yr p.a.*

but lets not forget the *

*Performance data as of 30 September 2007

wow, lets take results which finish just before the crash!!!!

 

[Bill.L]

Hi all,

Market Follower,

You have made 5 posts and all of them are just picking on Peter Spann.

You have not contributed one positive aspect.

What is YOUR interest in investment in general and Peter Spann in particular. Are you a holder of some of these units/shares, when did you buy them, why did you buy???

What are your investments and experience???

bye

 

[ffc1883_1996]

Hi all,

Market Follower,

You have made 5 posts and all of them are just picking on Peter Spann.

You have not contributed one positive aspect.

What is YOUR interest in investment in general and Peter Spann in particular.

I have a suspicion that Market Follower might just have an interest in an organization that’s currently attempting a hostile takeover of a Peter Spann managed financial product.

 

[Bill.L]

Hi Fitzroy,

You're not the only one who is aware of this,

That is why I have asked market follower about his interests in the funds plus his other investments.

bye

 

[Peter Spann]

2 free stock tips to the first person to correctly ID the showroom....

Oh me, me! Pick me - I know sir!!! It's Euromarque Brisbane on the day I picked up the car!!!

Two free stock tips for me – boom!

Sheesh, have we really stooped to this?

At least most of my detractors in here have actually contributed to the education of others by debating strategies and opinions.

This is just silly.

 

[Peter Spann]

wow, lets take results which finish just before the crash!!!!

Now, now, let's not get to cynical - that's a function of not keeping the website up to date.

But thanks for pointing it out - I'll make sure it's corrected.


Mind you over a 3 year rolling period the performance of our blended portfolio is still positive.

 

[mercurio]

Whilst they sound good in theory, in practice they need a skilled operator to effectively utilise.

My only beef with Peter Spann is that everything regarding option strategies is all rosy, while the true risks of trading this complex instrument is glanced over.

I reiterate what I am saying because a close family friend for is an avid fan of the Spann, recently asked me if i knew of this awesome option strategy and whether i use it - i.e. the synthetic bull spread. They were planning on selling one of their properties away to utilise this "magic moo cow".

I do understand if everything seems too hard, his followers and cashflow will diminish.

Thought I'd emphasize this for any newbies looking in, and to think twice about undertaking option strategies.

 

[chilliaa]

My only beef with Peter Spann is that everything regarding option strategies is all rosy, while the true risks of trading this complex instrument is glanced over.

I reiterate what I am saying because a close family friend for is an avid fan of the Spann, recently asked me if i knew of this awesome option strategy and whether i use it - i.e. the synthetic bull spread. They were planning on selling one of their properties away to utilise this "magic moo cow".

I do understand if everything seems too hard, his followers and cashflow will diminish.

Thought I'd emphasize this for any newbies looking in, and to think twice about undertaking option strategies.

I think its not that 'everything seems too hard' the problem with this type of strategy is that once it becomes a common thread in the market its returns become marginalised as more people adopt them. And then come the 'black swan' events that completely blow away any excess returns that may have been generated.

 

[mercurio]

And then come the 'black swan' events that completely blow away any excess returns that may have been generated.

That would apply to all traders of all products, not just options.

That is not completely true, as it depends on your risk management and position sizing.

Bull spreads are limited gain and loss strategies, so with correct capital allocation, even if a particular spread loses it should not be catastrophic to your overall account. If you plough all your capital into only one or two stocks using the synthetic bull spread (long stock + short higher strike call + long lower strike put), then yes black swan events can wipe you out.

Also trading the synthetic bull spread ties up to much capital, whereas if you trade the same spread with pure options (e.g. bull put spread = short higher strike put + long lower strike put) your margin requirements are much smaller.

Furthermore you can hedge your delta exposure so that your exposure to price movement is not excessive. The same goes for vega. For the short calls and puts discussed here, collecting premium is the main purpose so you are short vega. If you feel vega will increase in the future, this can be hedged with long vega positions such as long calendars etc.

This should confuse some people.

My point - It is not a walk in the park.

Options have so many variables affecting its price, that the Spann workshops do not adequately cover, for people to understand the risk they are taking, especially now in this bear market.

 

[mercurio]

As a further note

Often, and I have seen others that have posted about the difficulty of trading options, it is met by strong resistance.

I believe it may be because it sounds like im crushing peoples dreams to generate that side income to fund the IP.

All I am suggesting, is people get a much more detailed and stronger foundation of options theory than Spann seminars before trading. The last 4-5years have been good to covered call users, times aren't so easy now for that particular strategy.